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SCHEDULING NOTE: Roundtable will air at 89.5 FM at 12:30 p.m. today, instead of noon.

Water Rate Hikes For All But The Purple Pipe Users?

Audio

Aired 4/16/10

San Diegans used 11 per cent less water last year but those savings may not be reflected on water bills. This week, the Metropolitan Water District approved a 7.5 percent rate increase. Some water users, including businesses, homeowners associations, golf courses and public agencies, won't feel the pinch. We find out why.

GLORIA PENNER (Host): This is the Editors Roundtable. I’m Gloria Penner. I’m at the roundtable today with Tony Perry from the Los Angeles Times, Tom York from San Diego Business Journal, and from voiceofsandiego.org, Andrew Donohue. And we are switching topics. Yes, we in San Diego did use 11% less water in the past year than the year before. Congratulations. So our water bills should have been lower.

TONY PERRY (San Diego Bureau Chief, Los Angeles Times): No.

PENNER: Maybe, but not for long. Andrew, what’s the latest from the Metropolitan Water District on water rates?

ANDREW DONOHUE (Editor, voiceofsandiego.org): I – That’s – that’s not my topic, is it?

PENNER: Yeah, that’s your topic. You didn’t think it was? What did you think your topic was?

DONOHUE: I thought we were dealing with the – with Rob Davis’ story for potable water.

PENNER: Oh.

PERRY: Rates are going up.

PENNER: Well, then…

DONOHUE: There you go. Thank you.

PENNER: All right. Okay.

PERRY: Rates are going up and the availability of water is going down. And there’s a reason for that.

PENNER: Okay. All right. Well, let’s get to the part that Andrew is prepared for. Yes, Rob Davis in the Voice of San Diego wrote that golf course and businesses – golf courses and businesses that buy reclaimed water from the City escape rate hikes and that they actually get subsidized by the rest of us who pay for our water. Is that your story?

DONOHUE: I am ready to answer all those questions, yes.

PENNER: Okay.

DONOHUE: Yeah, basically, Rob did a really nice sort of enterprise story this week where he basically showed how if you pay – if you buy – if you’re a water consumer in San Diego of just potable water, of which there are 200,000, you are subsidizing, collectively, to the tune of $10.6 million the water use of 475 businesses, homeowner associations, golf courses and public agencies.

PENNER: All right. Now, the latest news that, again, I read in Voice of San Diego, is that the San Diego City Council could approve a $50,000 contract to study the $10.6 million annual subsidy that San Diegans are giving to golf courses, etcetera. What’s the point of paying more money to study what’s already happening?

DONOHUE: That’s a great question. I mean, this is sort of what the City does when it’s got an issue that it doesn’t really want to deal with. It just keeps studying it and studying and studying. I think what’s unique about this is they’ve been – this has been sort of one of those things that’s been kept from the council and kept from the public. We were able to run the story because we got a controver – basically a secret study that the City hadn’t released. But, you know, back in 2001, the City had basically built these treatment plants to take sewage and treat it to the level where it could be used for irrigation. Nobody was actually buying that so they voted to cut it down to a very, very low rate so they could actually start selling it to other water agencies and other users and everything like that. Now what’s happened is, is we’ve seen these water rates continue to rise 60% over the last few years but the City hasn’t actually raised that rate for its water use and there’s possible legal implications as well.

PENNER: Do you think, Tom, that all of this has to do with the fact that the City just isn’t paying attention?

TOM YORK (Contributing Editor, San Diego Business Journal): I think that’s part of it. It’s part of the overall sort of mismanagement of the City that goes back for decades. I just see it as another area where city officials just haven’t been on top of things.

PENNER: All right, so, while these agencies, business owners, businesses and golf courses and homeowners associations get water at a major discount, Tony—I’m coming back to you on this part—the residential ratepayers are expected to have to pay more. So what’s going on there?

PERRY: Well, as you point out, it’s an inequity and I read Rob Davis’ story, a fine piece of American journalism with all the facts and balanced and everything. I must say that water rates are one of those things that don’t worry me a lot. It’s availability of water. As William Mulholland, the great water baron, said, water is worth whatever it takes to get it, and that’s why we’re paying more even though we’re getting less. This study will deal with both the piping issue—one of the problems is, they haven’t built enough pipes, according to Rob’s story, to get this water to people who might potentially buy it. And the other issue is the legal issue, and I also read in Rob Davis’ story, $11.8 million to study, once again, toilet to tap. They’re not going to call it that. They’re going to call it perfume from your faucet or something like that. But – And around and around we go. Water’s one of those issues, and I’ve covered it for years, and there are really only x-number of issues and they keep getting dealt with over and over and over and over. And one of the issues is whether you charge people who are closer to the source less than people further away, whether you make a distinction between the uses, do you give the avocado farmers of North County a break—they did—but yet they can cut it off quicker. So availability, cost, and who gets and who pays goes around and around on water.

PENNER: Okay, so, Tom York, basically what we’re hearing from Tony is that, ah, this is one of those issues that won’t go away in San Diego. And what we’re hearing from Andrew is that, well, there’s a new twist to it and that has to do with the fact that some businesses and golf courses, etcetera, are getting the water that they used – use from the purple pipes for very, very little. What sense do you make of this? You’ve been covering business issues here for years.

YORK: Well, I – the way – You know, I haven’t drilled down into this story other than reading Rob’s report, and I think he did a great job. I would see this as a political issue once again where golf courses, you know, people who use this water are very politically powerful. Their business is – they’re part of the tourism industry and so they can put pressure where pressure needs to be put to keep their costs down. I mean, it’s one way they can kind of keep going in the face of, you know, lower amounts of water for availability for greens and that kind of thing.

PENNER: All right, well, let’s have our listeners weigh in on this one. So here’s the story, folks, as I understand it. Yes, you did save water this year, good for you. That meant that the amount of money that was being funneled to our various water agencies was less and at this point they are going to hike your water rates and, you know, kick up the money that is flowing in to them, if I may use that. So how do you feel about that? 1-888-895-5727, 895-KPBS. Basically, how do you feel about rates being raised for the water when you have obeyed the directive and you’ve lowered your water use? How do you feel – Oh, Tony, you said you didn’t – it isn’t much of an issue.

PERRY: Well, water is free. Water is free. What costs is getting it to you, and it costs as much to get you a gallon as it does three gallons. People don’t understand that. The water is free but the mechanisms, the pipes, the employees, the ditches, all of that costs, and those costs keep going up even if they’re supplying you less water. Yes, it leads to one’s sense of grievance. Get less, pay more. Welcome to water.

DONOHUE: And that’s the problem, is we have such – right now we have such a scarcity of water and we’re having so many problems with the actual sources that we – where we get our water from San Diego, that they’re having to build more and more infrastructure.

PERRY: And remember, of course, San Diego should not exist.

DONOHUE: Yeah, and we…

PERRY: If water…

DONOHUE: …we bring in 90% of our water from out…

PERRY: If water was the only thing that makes or breaks the city—county—we would not exist without the Metropolitan Water District of Southern California. We have no water to speak of of our own. We ought to be a desert.

PENNER: Yes, possibly that’s what we ought to be but we’re not. Let’s dig back into that story a little bit, Andrew. How did San Diego’s 200,000-plus water customers end up subsidizing the golf courses, biotech companies and homeowners associations?

DONOHUE: Yeah, well, basically most of the time when these – when the cities do recycle this water to use it for irrigation, they do put it as a discount because obviously it’s not as valuable as water that you could drink and use for irrigation. But the key is, is normally that discount’s about 10% so you’re encouraging somebody like Qualcomm to take this water, use it on their yards and on their shrubbery and on that sort of stuff. They save money and you then have more potable water just to use to ship, to be drunk rather than being dumped back in the ocean. The key is, is that in San Diego that discount’s about 78% and the legal issue there is that in the law it says that you – that certain groups of ratepayers cannot be subsidizing the use of others. So that – I think that’s one of the issues that’s going to be on the table right now.

PERRY: But their big court case is they can talk about categories.

DONOHUE: Exactly.

PERRY: But you can’t get – if we’re both in the same category, I can’t subsidize or shouldn’t be able to subsidize your residential water use. Unlike, say, ooh, Prop 13 where the guy across the street with the same house I have pays a third the property tax. I’m subsidizing him.

PENNER: Well…

PERRY: But on water, if we’re in the same category, you can’t do that. If you’re in different categories, the courts have held, then it becomes legal. It becomes more of a political question. Is 10% subsidy okay? 70% egregious? We’ll find out.

DONOHUE: Yeah, and if you remember that actually the City of San Diego got in trouble for this because…

PERRY: Yes.

DONOHUE: …normal water users, you know, sort of residential water users were subsidizing, for a long time, industrial water users and the City of San Diego actually kept that secret even though they knew it under sort of the Dick Murphy and Jim Madaffer era.

PENNER: Let’s hear from Marianne in El Cajon. Hi, Marianne, what do you have to say to the editors on the subject?

MARIANNE (Caller, El Cajon): Good morning. I’m actually in the Mt. Helix Water District and we had the new meters put in, the digital meters. And what I have noticed within probably the last nine months is they’re taking their readings from the previous year and saying that that’s what this year’s readings are. We’ve had the low flow toilets put in, the showerheads that are, you know, regulated, xeriscape backyard. We’re actually using less water but paying more even with these great new meters that they have. And so that’s just my comment. I have had the water company come out and they’re just projecting on the previous year’s water usage. So that’s what my comment is. And I’m not – I’m outraged about the whole water raising.

PENNER: Okay. Tom York, I mean, is that – does that sound like it’s the best practices to have water based on last year’s usage?

YORK: It does not to me, and I think that’s one issue that – or it raises one issue about water being run by municipalities is that they’re basically monopolies, they’re not – they don’t reflect market rates or market values and so you get into these situations like we’re facing here in San Diego with the reclaimed water or with installing, you know, different types of devices in other water districts is that, you know, it’s a separation from the market. It’s just not meeting market demand.

PENNER: Okay, thank you very much. Thank you, Marianne. Final question on this, Andrew. Has there been any acknowledgement from the County Water Authority or the City of San Diego on any of these developments?

DONOHUE: No, not that I know of but I think what’s interesting here is the purple pipe – this whole discussion is about sort of the purple pipe recycled water but, like Tony brought up, the City of San Diego’s moving ahead and actually turning this water into drinkable water rather than just for irrigation, so it sort of makes the whole purple pipe argument almost irrelevant as people are starting to move forward and just looking at using this for actual drinking water.

PENNER: Okay, well, thank you very much, gentlemen, on that issue. And what I’d like to do before we end up is the news today and maybe even last night brought information that the City of San Diego is once again having a $28 million shortfall. It was hoped that maybe the budget that had been passed for $179 million that was going to take us right through the end of June 2011 would be solid but it looks like there’s another $28 million hole. So the mayor has said that he’s not going to cut any services, which is, you know, good for those of us who live in the city of San Diego but what should be cut with a $28 million hole? I’m going to ask you to put on your thinking caps and tell me what you would cut if you were the mayor of San Diego and you had his power and the power of the city council. All right, Andrew, I know you’re quick on your feet so I’m throwing this at you first.

DONOHUE: I’ll try to be quick on my feet. Basically what I would do is actually put together what the mayor was supposed to do about 41 months ago when he took into office which is a comprehensive plan that both cuts, like you talked about, but also raises revenue. I mean, this has been the thing we’ve been talking about for years now in San Diego and no leader’s been willing to be courageous enough to actually put together some sort of comprehensive package that solves these problems once and for all.

PENNER: Okay, thank you, Andrew. Tom York, if you were mayor and city council rolled into one, what would you be doing at this point?

YORK: Well I think one small area, we could probably increase the rates for reclaimed water to where we could make a little bit of money on it and throw it at the deficit.

PENNER: Seriously.

YORK: I’m serious.

PENNER: You are. Okay, with that…

YORK: I mean, it’s not – it’s not – I think this is the problem with government is that no comprehensive, overall, top down review of spending and revenues has ever been done and it just continues to – Every year to year, there’s a surprise here, surprise there. So it’s just stumbling forward year to year.

PENNER: But I thought that that’s the reason that we were reengineering the City of San Diego so that we could do, you know, efficiencies and top down analysis.

YORK: Well saying you’re going to do something and actually doing it are two different things.

PENNER: All right…

YORK: I think we’ve learned that the hard way.

PENNER: Tony, you get the last ten seconds.

PERRY: One reason I think the Tea Parties aren’t flowering in San Diego is this is anti-tax heaven. We’ve been anti-tax for years. Free garbage pickup for single family homes. Only place in the country where that occurs.

PENNER: Okay, I got your drift. Thank you so much. Thank you to Tony Perry and to Tom York and Andrew Donohue. Thanks to our callers and our listeners. And this has been the Editors Roundtable on KPBS. I’m Gloria Penner.

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